Roynat Capital Inc. et al. v. Repeatseat Ltd. et al., (2015) 333 O.A.C. 55 (DC)

• Judge: J. Wilson, Harvison Young and Tzimas, JJ.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: February 18, 2015
• Jurisdiction: Ontario
• Citations: (2015), 333 O.A.C. 55 (DC);2015 ONSC 1108

Roynat Capital Inc. v. Repeatseat Ltd. (2015), 333 O.A.C. 55 (DC)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. MY.011

Roynat Capital Inc., RPS Capital LP, by its general partner Knight's Bridge Capital Partners Inc. and Knight's Bridge LP by its general partner Knight's Bridge Capital Partners Inc. (plaintiffs/appellants) v. Repeatseat Ltd., Repeatseat, Inc., Comptrol Systems Inc., Blake Cassels & Graydon LLP, Michelle Susan Cooze, Mary Benning, Clark Johannson, George Davidson, Robert Christianson, George Watson, Shari Pusch, Max Fantuz and Gary Bentham (defendants/respondents)

(69/14; 2015 ONSC 1108)

Indexed As: Roynat Capital Inc. et al. v. Repeatseat Ltd. et al.

Court of Ontario

Superior Court of Justice

Divisional Court

J. Wilson, Harvison Young and Tzimas, JJ.

April 8, 2015.

Summary:

The plaintiffs advanced a claim in negligent misrepresentation against Blake Cassels and Graydon LLP (Blakes) and the associate lawyer from Blakes (the Associate) who acted for the defendants in a financing transaction gone wrong. The defendants pled that Blakes made no representation. They asserted that in all probability the plaintiffs received legal advice from their own counsel, Cassels Brock & Blackwell LLP (Cassels), that would refute the plaintiffs' claim of reliance. Reversing a Master's decision, Greer, J., ordered the plaintiffs to answer refused questions concerning the legal advice they received concerning the alleged misrepresentation. Greer, J., concluded that the plaintiffs placed their state of mind in issue by claiming that they relied upon a representation made by Blakes. The plaintiffs were deemed to have waived solicitor client privilege for the legal advice that they received, as the principles of fairness and consistency required that the questions be answered to allow Blakes and the Associate to adequately defend against the plaintiffs' reliance claim. The plaintiffs applied for leave to appeal from the decision of Greer, J.

The Ontario Divisional Court, per Corbett, J., in a decision reported at [2014] O.A.C. Uned. 543, granted leave to appeal.

The Ontario Divisional Court dismissed the appeal.

Courts - Topic 1127

Masters - Appeals from - Standard of review - The plaintiffs advanced a claim in negligent misrepresentation against Blake Cassels and Graydon LLP (Blakes) and the associate lawyer from Blakes (the Associate) who acted for the defendants in a financing transaction gone wrong - The defendants pled that Blakes made no representation - They asserted that in all probability the plaintiffs received legal advice from their own counsel, Cassels Brock & Blackwell LLP (Cassels), that would refute the plaintiffs' claim of reliance - Reversing a Master's decision, the motions judge ordered the plaintiffs to answer refused questions concerning the legal advice they received concerning the alleged misrepresentation - The plaintiffs were deemed to have waived solicitor client privilege for the legal advice that they received - The plaintiffs appealed - The plaintiffs challenged the findings of fact made by the motions judge and argued that there was no palpable and overriding error in the findings of fact made by the Master - Hence the Master's findings of fact should have been respected and the motions judge erred in substituting her findings - The Ontario Divisional Court concluded that "the motions judge appropriately challenged the findings of fact of the Master given that the Master's findings of fact where made in the context of applying the incorrect legal test. There can be no deference to the Master's factual findings in these circumstances" - See paragraphs 69 to 79.

Evidence - Topic 4256

Witnesses - Privilege - Lawyer-client communications - Waiver - Putting communication in issue - The plaintiffs advanced a claim in negligent misrepresentation against Blake Cassels and Graydon LLP (Blakes) and the associate lawyer from Blakes (the Associate) who acted for the defendants in a financing transaction gone wrong - The defendants pled that Blakes made no representation - They asserted that in all probability the plaintiffs received legal advice from their own counsel, Cassels Brock & Blackwell LLP (Cassels), that would refute the plaintiffs' claim of reliance - A motions judge ordered the plaintiffs to answer refused questions concerning the legal advice they received concerning the alleged misrepresentation - She concluded that the plaintiffs placed their state of mind in issue by claiming that they relied upon a representation made by Blakes - The plaintiffs were deemed to have waived solicitor client privilege for the legal advice that they received, as the principles of fairness and consistency required that the questions be answered to allow Blakes and the Associate to adequately defend against the plaintiffs' reliance claim - The Ontario Divisional Court dismissed the plaintiffs' appeal - The motions judge correctly adopted the principles outlined in Creative Career Systems Inc. et al. v. Ontario (2012 ONSC), and appropriately crafted its applicability to a case of alleged reliance - The motions judge was correct in her legal analysis and her conclusion that deemed waiver of solicitor client privilege could apply when a party alleged reliance and may have received legal advice challenging the assertion of reliance - The privilege was not automatically waived, but was subject to the analysis of fairness and consistency - See paragraphs 60 to 64.

Evidence - Topic 4256

Witnesses - Privilege - Lawyer-client communications - Waiver - Putting communication in issue - The plaintiffs advanced a claim in negligent misrepresentation against Blake Cassels and Graydon LLP (Blakes) and the associate lawyer from Blakes (the Associate) who acted for the defendants in a financing transaction gone wrong - The defendants pled that Blakes made no representation - They asserted that in all probability the plaintiffs received legal advice from their own counsel, Cassels Brock & Blackwell LLP (Cassels), that would refute the plaintiffs' claim of reliance - A motions judge ordered the plaintiffs to answer refused questions concerning the legal advice they received concerning the alleged misrepresentation - She concluded that the plaintiffs placed their state of mind in issue by claiming that they relied upon a representation made by Blakes - The plaintiffs were deemed to have waived solicitor client privilege for the legal advice that they received, as the principles of fairness and consistency required that the questions be answered to allow Blakes and the Associate to adequately defend against the plaintiffs' reliance claim - The plaintiffs appealed - The plaintiffs argued that the motions judge erred in law by placing too much weight on a consideration of "fairness and consistency" - The Ontario Divisional Court dismissed the appeal - The motions judge correctly performed the gatekeeper function and appropriately concluded that the interests of fairness and consistency required the limited questions in issue be answered - See paragraphs 80 to 88.

Evidence - Topic 4256

Witnesses - Privilege - Lawyer-client communications - Waiver - Putting communication in issue - The plaintiffs advanced a claim in negligent misrepresentation against Blake Cassels and Graydon LLP (Blakes) and the associate lawyer from Blakes (the Associate) who acted for the defendants in a financing transaction gone wrong - The defendants pled that Blakes made no representation - They asserted that in all probability the plaintiffs received legal advice from their own counsel, Cassels Brock & Blackwell LLP (Cassels) that would refute the plaintiffs' claim of reliance - A motions judge ordered the plaintiffs to answer refused questions concerning the legal advice they received concerning the alleged misrepresentation - She concluded that the plaintiffs placed their state of mind in issue by claiming that they relied upon a representation made by Blakes - The plaintiffs were deemed to have waived solicitor client privilege for the legal advice that they received, as the principles of fairness and consistency required that the questions be answered to allow Blakes and the Associate to adequately defend against the plaintiffs' reliance claim - The plaintiffs appealed - One issue raised was whether the party seeking disclosure had to plead the issue of reliance on legal advice - The Ontario Divisional Court stated that the motions judge was correct in her conclusion that it was not necessary for the defendants to plead reliance on the legal advice received - See paragraphs 90 to 94.

Practice - Topic 4261

Discovery - Examination - Range of - Privileged topics or communications - [See all Evidence - Topic 4256 ].

Cases Noticed:

Solosky v. Canada, [1980] 1 S.C.R. 821; 30 N.R. 380, refd to. [para. 1].

R. v. McClure (D.E.), [2001] 1 S.C.R. 445; 266 N.R. 275; 142 O.A.C. 201; 2001 SCC 14, refd to. [para. 1].

Lavallee, Rackel & Heintz et al. v. Canada (Attorney General), [2002] 3 S.C.R. 209; 292 N.R. 296; 312 A.R. 201; 281 W.A.C. 201; 164 O.A.C. 280; 217 Nfld. & P.E.I.R. 183; 651 A.P.R. 183; 2002 SCC 61, refd to. [para. 1].

Creative Career Systems Inc. et al. v. Ontario et al., [2012] O.T.C. Uned. 649; 2012 ONSC 649, appld. [para. 7].

Kirkbi AG et al. v. Ritvik Holdings Inc. et al., [2000] F.T.R. Uned. 658; 97 A.C.W.S.(3d) 1094 (T.D.), dist. [para. 7].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 9].

Zeitoun et al. v. Economical Insurance Group (2009), 236 O.A.C. 76; 91 O.R.(3d) 131 (Div. Ct.), affd. (2009), 257 O.A.C. 29; 96 O.R.(3d) 639; 2009 ONCA 415, refd to. [para. 10].

Leadbeater v. Ontario (2004), 70 O.R.(3d) 224 (Sup. Ct.), refd to. [para. 10].

Kennedy v. McKenzie et al., [2005] O.T.C. 385; 139 A.C.W.S.(3d) 843, refd to. [para. 10].

Guelph (City) v. Super Blue Box Recycling Corp., [2004] O.T.C. 961; 134 A.C.W.S.(3d) 787 (Sup. Ct.), consd. [para. 39].

Rogers v. Bank of Montreal (1985), 61 B.C.L.R. 239 (S.C.), refd to. [para. 46].

Rogers v. Bank of Montreal (1985), 62 B.C.L.R. 387 (C.A.), refd to. [para. 47].

Allarcom Ltd. v. Canwest Broadcasting Corporation (1987), 19 B.C.L.R. 167 (S.C.), refd to. [para. 48].

Lloyds Bank Canada v. Canada Life Assurance Co. (1991), 25 A.C.W.S.(3d) 25 (Ont. Gen. Div.), refd to. [para. 49].

Toronto-Dominion Bank v. Leigh Instruments Ltd. (Bankrupt) et al. (1997), 31 O.T.C. 267; 32 O.R.(3d) 575 (Gen. Div.), refd to. [para. 50].

Bank Leu AG v. Gaming Lottery Corp. et al. (1999), 100 O.T.C. 106; 92 A.C.W.S.(3d) 270 (Sup. Ct.), refd to. [para. 51].

Bank Leu AG v. Gaming Lottery Corp. et al. (2000), 132 O.A.C. 127; 43 C.P.C.(4th) 73 (Div. Ct.), refd to. [para. 52].

L'Abbé et al. v. Allen-Vanguard Corp., [2011] O.T.C. Uned. 7575; 2011 ONSC 7575 (Sup. Ct.), refd to. [para. 53].

International Minerals & Chemical Corp. (Canada) Ltd. et al. v. Commonwealth Insurance Co. et al. (1993), 104 Sask.R. 216 (Q.B.), refd to. [para. 54].

Sovereign General Insurance Co. v. Tanar Industries Ltd. et al. (2002), 316 A.R. 212; 2002 ABQB 101, refd to. [para. 54].

S. & K. Processors Ltd. v. Campbell Ave. Herring Producers Ltd. (1983), 45 B.C.L.R. 218 (S.C.), refd to. [para. 82].

Bechthold v. Wendell Motor Sales Ltd., [2007] O.T.C. Uned. P29; 162 A.C.W.S.(3d) 585, refd to. [para. 91].

Authors and Works Noticed:

Lederman, Sidney N., Bryant, Alan W., and Fuerst, Michelle K., The Law of Evidence of Canada (4th Ed. 2014), ss. 14.147, 14.148 [para. 32].

Counsel:

Nancy Tourgis and Simon Zucker, for the plaintiffs/appellants;

James Renihan, for the defendants/respondents.

This appeal was heard on February 18, 2015, before J. Wilson, Harvison Young and Tzimas, JJ., of the Ontario Divisional Court. The following judgment of the Divisional Court was delivered by J. Wilson, J., and was released on April 8, 2015.